Grant tax abatement request by Kilwin's

April 20, 2009

Of course the Petoskey City Council should be concerned with the competitive health of all businesses in the community, but council should still approve tax abatements being sought by Kilwin's Chocolates when it meets today, April 13.

Council deferred a decision at its April 6 meeting, and since then Kilwin's has withdrawn a request for variances to allow it to add a possible second story to the former Oleson's store, which the company wants to remodel into a manufacturing facility with a retail component.

The fear expressed at council was that retail component, if Kilwin's got the tax break, would put the company at a competitive advantage over other confection purveyors in the city, notably Bob-In Again, the franchised Kilwin's outlet on Howard Street, Murdick's Fudge and American Spoon Gelato Cafe.

The city hasn't given tax abatements to retail outlets, only industrial operations. And that's what's being sought here.

Kilwin's is asking for an abatement on a proposed $2 million construction investment, and on the equipment that would be installed in the production area. Altogether, the companies tax liability would drop about $359,000 over the course of the abatements.

Advertisement

But the taxes on the property, even with the abatement, would rise $36,000 a year.

Kilwin's already has a retail component at its manufacturing facility on Division Road in Bear Creek Township, this would not be a departure for them.

And we can't imagine that visitors taking the "kitchen tour" at the expanded plant wouldn't want to at least be able to buy the products they just saw being made (how often do you go through a museum or other tourist attraction and the last thing you get channeled through is the gift shop?).

To be fair to council, Kilwin's first came to get a rezoning change that would allow the production facility to go into the old Oleson's building. Council obliged. Then the tax abatement came down the line, followed by a request for variances to add a second story.

If we were council, we might feel like we were being pecked to death by ducks as each new item landed on our desk.

But the fact remains that this is an opportunity to help a local manufacturer expand their operations, add some jobs and continue to be a viable, financially healthy part of our business community.

Kilwin's is worthy of the tax abatements, and council should grant them.